Plan and forecast sales

Every year brings new challenges and opportunities. So, it's crucial to consider any changes that could impact your sales. These factors, known as sales forecast assumptions, form the basis of your sales projection.

Examples of sales forecast assumptions

Sales forecasts assumptions come from analysing past sales data, industry benchmarks, and economic trends. Forecasts are never entirely accurate but, when making one, it's important to be as objective as possible. Make sure to gather the necessary data to input into your forecast model.
These are various examples of sales forecast assumptions:

• Market growth – you expect the market you operate in to grow by 2%.
• Market share – you expect your market share to decrease by 2% due to a competitor's success.
• Sales force expansion – you plan to double your sales team from three to six members halfway through the year. This may expand your outreach and potential sales.
• Advertising budget – you cut the advertising budget by 50%. This may lead to fewer enquiries from potential customers.
• Relocation - you are moving to a better location. This will lead to 30% more customers buying next year.
• Pricing strategy - you are raising prices by 10%. This will cut sales volume by 5% but lift revenue by 4.5%.
• New product launches - a new product range will likely cost more than it earns in the first year. Yet, it is expected to reap the benefits in the future.
• High-potential products - products with the potential for rapid sales growth.
• Established products - products that maintain steady sales with little growth potential.
• Declining products - products whose sales are falling. This could be due to a competitor's better offerings. 

For new businesses, the assumptions need to be based on market research and good judgement.